Slide 1: Q3FY21 Results
Q3FY21 Results PERIOD ENDING JUNE 30, 2021 Published July 26, 2021
Slide 2: Forward-looking statements
Forward-looking statements This presentation and associated commentary forward-looking statements including, among other things, statements regarding the continuing strength and momentum of F5’s business, past and future financial performance including revenue, operating targets, earnings and earnin
Slide 3: GAAP to non-GAAP presentation
GAAP to non-GAAP presentation In addition to financial information prepared in accordance with U.S. GAAP, this presentation also contains adjusted financial measures that we believe provide investors and management with supplemental information relating to operating performance and trends that facil
Slide 4: Introduction
Introduction François Locoh-Donou, CEO & President 4 | ©2021 F5
Slide 5: GAAP results
GAAP results Q3FY20 Q3FY21 Revenue $583.3M $651.5M Gross margin 81.8% 81.4% Operating margin 15.0% 14.8% Net income $69.9M $89.6M Diluted EPS $1.14 $1.46 5 | ©2021 F5
Slide 6: Escalating demand for applications and application growth is driving demand for F5
Escalating demand for applications and application growth is driving demand for F5 Q3FY21 Growth Drivers +21% +4% Product Global Services +34% +13% Software Systems *GROWTH MEASURES ARE NON-GAAP. SEE APPENDIX FOR GAAP-TO-NON-GAAP RECONCILIATIONS. 6 | ©2021 F5
Slide 7: Q3FY2021 Results
Q3FY2021 Results Frank Pelzer, CFO & EVP 7 | ©2021 F5
Slide 8: Q3FY21 revenue mix
Q3FY21 revenue mix $700 Growth $652 11% $586 $600 $129 $97 +34% Revenue $ in millions $500 $180 $400 $159 +13% $300 $200 +4% $342 $330 $100 $0 Q3FY20* Q3FY21 Global Services Systems Software *Q3FY20 REVENUE IS NON-GAAP. SEE APPENDIX FOR GAAP-TO-NON-GAAP RECONCILIATIONS. TOTALS MAY NOT ADD DUE TO ROU
Slide 9: Software growth continues across multiple consumption models
Software growth continues across multiple consumption models $140.0 $120.0 $28.9 $100.0 54% $26.4 Total software $ in millions $80.0 revenue growth (3-yr CAGR) $60.0 $24.5 $100.5 $40.0 $20.0 $25.8 $42.9 $70.2 119% Subscription software 4% Perpetual software $9.6 revenue growth (3-yr CAGR) revenue gr
Slide 10: Growing software revenue from subscriptions
Growing software revenue from subscriptions 27% 22% 73% 78% Q3FY20* Q3FY21 Subscription Perpetual *Q3FY20 REVENUE IS NON-GAAP. SEE APPENDIX FOR GAAP-TO-NON-GAAP RECONCILIATIONS. 10 | ©2021 F5
Slide 11: Q3FY21 revenue contribution by geography
Q3FY21 revenue contribution by geography Revenue growth Non-GAAP 11% $ in millions $ in millions 19% $110 +3% 18% $114 contribution by geo 24% 26% $168 % of revenue $141 +19% 57% $334 +10% 57% $369 Total Total $586 $652 Q3FY20* Q3FY21 North America EMEA APAC *Q3FY20 REVENUE IS NON-GAAP. SEE APPENDIX
Slide 12: Q3FY21 customer verticals as a % of product bookings
Q3FY21 customer verticals as a % of product bookings 18% 17% % of total product bookings 67% 69% 15% 15% Q3FY20 Q3FY21 Service Providers Enterprise Government TOTALS MAY NOT ADD TO 100% DUE TO ROUNDING. 12 | ©2021 F5
Slide 13: Q3FY21 non-GAAP gross and operating margins
Q3FY21 non-GAAP gross and operating margins NON-GAAP GROSS MARGIN NON-GAAP OPERATING MARGIN 100.0% 30.5% 84.4% 84.1% As a % of non-GAAP revenue 30.0% 28.6% 80.0% 60.0% 20.0% 40.0% 10.0% 20.0% 0.0% 0.0% Q3FY20 Q3FY21 Q3FY20 Q3FY21 SEE APPENDIX FOR GAAP-TO-NON-GAAP RECONCILIATIONS. 13 | ©2021 F5
Slide 14: Q3FY21 non-GAAP net income and EPS
Q3FY21 non-GAAP net income and EPS Q3FY21 non-GAAP effective NON-GAAP NET INCOME NON-GAAP EPS tax rate of 14.0% resulting $169.1 from an election made with our $170.0 $2.80 $2.76 FY20 U.S. income tax return $160.0 $2.70 Non-GAAP Net Income filed during Q3. Non-GAAP EPS in $ $2.60 $150.0 $ in million
Slide 15: Q3FY21 cash flow from operations
Q3FY21 cash flow from operations $200 $182 $180 $175 $159 $160 $137 $140 $128 $120 $ in millions $100 $80 $60 $40 $20 $0 Q3FY20 Q4FY20 Q1FY21 Q2FY21 Q3FY21 15 | ©2021 F5
Slide 16: Q3FY21 cash and investments
Q3FY21 cash and investments $1,600 $1,462 $1,400 Q3FY21 cash balance $1,313 $1,206 reflects completed $500M $1,200 accelerated stock $ in millions repurchase initiated in Q221 $1,000 $863 F5 also holds ~$370M in $800 $662 debt associated with Shape $600 acquisition $400 $200 $0 Q3FY20 Q4FY20 Q1FY21
Slide 17: We will take a balanced approach to capital deployment
We will take a balanced approach to capital deployment We are committed to returning capital to shareholders SHARE REPURCHASES ($ IN MILLIONS) • In Q3FY21 we completed a $500M accelerated share $700 repurchase initiated in Q2FY21. $600 • During FY22, we are committed to $500M in share repurchases $6
Slide 18: Business Outlook
Business Outlook 18 | ©2021 F5
Slide 19: Q4FY21 outlook
Q4FY21 outlook PROVIDED JULY 26, 2021 Q4FY21 Revenue $660 - $680M Non-GAAP gross margin 84% - 84.5% Non-GAAP operating expense $346 - $358M Non-GAAP diluted EPS $2.68 - $2.80 Non-GAAP effective tax rate ~19% for FY21 Share-based compensation $62 - $64M 19 | ©2021 F5
Slide 20: Business Overview
Business Overview François Locoh-Donou, CEO & President 20 | ©2021 F5
Slide 21: F5 is benefiting from strong and sustainable customer trends
F5 is benefiting from strong and sustainable customer trends Enterprise customers’ developers and dev ops teams are using NGINX to insert security earlier 1 in the application life cycle Heightened security concerns and high-profile ransomware attacks are escalating demand for 2 top-notch security a
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Slide 23: Appendix
Appendix 23 | ©2021 F5
Slide 24: GAAP to non-GAAP reconciliation
GAAP to non-GAAP reconciliation ($ in thousands) Q3FY20 Q3FY21 GAAP revenue $583,252 $651,515 Acquisition-related write-downs of assumed deferred revenue $2,670 $0 Non-GAAP revenue $585,922 $651,515 GAAP gross profit $477,212 $530,611 Stock-based compensation $6,771 $7,209 Amortization of purchased
Slide 25: GAAP to non-GAAP reconciliation
GAAP to non-GAAP reconciliation ($ in thousands) Q3FY20 Q3FY21 GAAP operating income $87,621 $96,412 Total adjustments related to revenue $2,670 $0 Total adjustments related to gross profit $14,495 $17,486 Total adjustments related to operating expense $63,037 $84,969 Total adjustments related to in
Slide 26: GAAP to non-GAAP reconciliation
GAAP to non-GAAP reconciliation The non-GAAP adjustments, and F5's basis for excluding them from non-GAAP financial measures, are outlined below: Acquisition-related write-downs of assumed deferred revenue. Included in its GAAP financial statements, F5 records acquisition-related write-downs of assu
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